Westrock Coffee Holdings is going public through a SPAC merger with Riverview Acquisition Corporation (RVAC). Coffee is a secularly growing category both domestically and internationally. It is also a large, fragmented $318B TAM. Coffee consumption is one of the few consumer habits that accelerated during the pandemic and continued to grow as COVID-19's impact ebbed. Coffee companies have been among the few to have successful IPOs still trading above the IPO price over the past two years. Westrock Coffee will seek to repeat that success when it de-SPACs in Q3.
Westrock Coffee sits in the nexus between coffee growers and end consumers. It offers a number of services to coffee sellers from sourcing, roasting, brewing, blending, packaging, and formulation. It supplies more than half the largest retailers, QSRs, and C-stores. Westrock Coffee is the largest store label coffee and tea provider to U.S. restaurants. Consumers drink 20 million cups of its coffee daily. The ongoing shift in the consumers' coffee consumption to cold brew, pods, and RTDs underpins the company's investments for expansion.
Not only is Westrock Coffee profitable, but the company's growth drivers in the next few years are highly visible. The company's 20% revenue CAGR and margin expansion are best in class for top and bottom-line growth. At the $10 SPAC offer price shares are attractively valued at 12.3x 2023 EBITDA projections.
In our preview, we will conduct a deep dive into the company's history, management's background, the business model, drivers of revenue and margins, its opportunity set, and its valuation framework.
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